Utility vehicles maker, Mahindra and Mahindra (M&M), is considering reinstating the entire staff laid off by South Korean sports utility vehicle (SUV) manufacturer Ssangyong Motor Co in the next two to three years, according to M&M president (automotive and farm equipment sectors) Pawan Goenka.
Ssangyong, acquired by M&M in November 2010, had laid off 2,600 staff (or 37 per cent of its workforce) in 2009, owing to a severe liquidity crunch.
“When we bought Ssangyong, we had purchased it keeping all these things behind us. So, there is nothing that we have done in terms of layoffs after we took over. However, our intention is as the business conditions improve and our sales volumes go up, we will start employing some of these people back. That’s our plan... but we cannot do it overnight,” he said.
Speaking to the media after launching M&M’s compact SUV ‘Quanto’ in the Hyderabad market on Tuesday, Goenka said though Ssangyong’s overall sales volumes grew last year, the Korean and European markets, the not-so-important markets for M&M but key for Ssangyong, had seen a degrowth.
“The overall sales volumes have been flat this year, as compared to last year. Only when the volumes grow will we be able to employ all these people back. We should start in the next two to three months, in a small manner. It will probably take two to three years to reinstate the entire staff,” he added.
Rexton to hit roads in Oct
The premium SUV from Ssangyong’s stable, Rexton, the first of the three products that have been lined up by M&M and the Korean company, will be rolled out in October this year, Goenka said.
“We are investing close to Rs 1,500 crore for the development of Rexton alone. While we will be announcing the second product shortly, the third one is in the planning stage,” he said, adding that equally important for M&M was the three-and four-cylinder engine development programme that it was doing with Ssangyong, for both the companies’ diesel and petrol vehicles.
Production at AP tractor plant in 3 months
Goenka said that M&M will formally start production at its tractor plant in Zaheerabad, Andhra Pradesh, in three months from now. The company had established the tractor plant on 100 acre with an investment of Rs 300 crore.
The Zaheerabad will manufacture tractor models in the range of 30 horse power (HP) to 90 HP for both domestic as well as the export markets, with all models conforming to emission norms prevalent in India, Europe and the US.
“The plant has an installed capacity of 100,000 tractors a year, which can be scaled up to meet additional demand,” he said, adding that the Zaheerabad facility was going in the direction of becoming an automotive hub.
Replying to a query on the Competition Commission of India (CCI) slapping show-cause notices on 17 automobile manufacturers, including M&M, on an alleged anti-competitive practice of selling spare parts at higher prices to consumers, Goenka said the company was still trying to understand the report that CCI had sent to it.
“I think the concern is not more on the pricing but is more on restricting distribution of spare parts. CCI’s contention is that the spare parts should be freely available everywhere, which is where auto companies have different polices. M&M, except for Scorpio and Verito, makes the spare parts available everywhere. Therefore, we think that we are perfectly fine. We, however, will take a look and talk to them (CCI) and understand where the problem is coming from,” he added.